Infrastructure development is widely acknowledged as the key to achieving growth, which has also been the focus of the government of India in its recent plans and policies. In fact, the government of India has set its ambition to become a US$5 trillion economy by 2024. It is therefore unsurprising to find that at the heart of all the planned infrastructure development is the cement sector, and as part of the country’s bouquet of eight core industries, the cement sector is key for laying the foundation of a new India.
Accounting for close to 10% of global installed capacity, the Indian cement industry is the second largest in the world. It plays a foundational, binding, and pivotal role in both the infrastructure and socioeconomic development of the country. Moreover, it is the fifth largest revenue contributor to the exchequer, as it contributes over INR 500 billion/yr to the government via taxes and levies. Total installed capacity in the Indian cement sector is approximately 530 million t3 as of 2017 – 18, while cement production touched about 300 million t3. Dominated by domestic players, the Indian cement industry has been a first mover with regard to keeping pace with changing socioeconomic and environmental paradigms, whether it is adoption of new technologies, adherence to stricter environmental standards, or utilising other industries’ waste produce. Its essential characteristics lend the cement industry a fundamental role vis-à-vis its compatriots in the core infrastructure sector basket – the industry is the foundation and binding force for all infrastructure projects, such as roads, bridges, housing, sanitation, water conservation, ports, airports, etc. Therefore, both from the perspective of the country’s future development and the cement industry, promoting sectoral growth is important for increased investments and capacity additions.
India’s economic growth vis-à-vis cement industry’s progress: trend analysis
At a CAGR of 9%, India has added almost 40% of its existing cement manufacturing capacity over the past decade. This is above the average GDP growth rate of India at 7% over the same period.6 Moving forward, amidst the news of global economic slowdown, monetary agencies have revised India’s growth forecast to 6.1% for 2019 – 20. It should be expected to be back on track over the medium term given the priority being accorded for the infrastructure development by the government in its various plans and policies. The Indian cement industry, with a sufficient buffer of capacity, is well placed to support even an aggressive growth rate.
Indian cement industry: the best plans, the best plants Some Indian cement plants have achieved a specific energy consumption level of 676 Kcal/kg of clinker (thermal) and 63.9 kWH/t of cement, which is comparable with the best in the world. Considering the size and scale of production, and most advanced plants across the country, the Indian cement industry is comfortably on a pathway to mitigating its carbon footprint with further expansions and adoption of efficient practices. Policy push and proactive participation of industry has delivered results for the Indian cement sector. There is huge potential for utilisation of Refuse Derived Fuel (RDF) and biomass in cement plants. Development of a viable business model for RDF and biomass and its use in the cement sector, however, requires a wider look at the waste management plan with a feasible business model, the financial needs, gaps and instruments for fiscal incentives. India ranks 4th in alternative fuel utilisation in absolute terms. The Indian cement sector exemplifies the principles of a circular economy by making the most out of waste/rejects from other industries as a key source of energy and/or raw material. Improvements in clinker factor and thermal substitution rates are testimony of the same, and the same is evident from reductions in carbon emission intensity over the last few years. Recently, the Indian cement sector has been an active partner and collaborator in the government’s ‘Clean India’ programme Swachhata hi Sewa. This year, the focus of this initiative has been on reducing the use of single use plastics (SUP). The programme, ran from 11 September 2019 to 27 October 2019. It consisted of two phases; the first phase has focused on generating awareness of the adverse impact of SUPs (11 September – 1 October 2019), and in the second phase, the focus is on disposal of plastic waste through various mechanisms in which the cement industry is playing a major role. In the first phase itself, the Indian cement industry undertook over 500 awareness activities, reaching out to 17 states, 377 villages, and sensitising more than 300 000 people across the country.
Regulatory reforms for resource optimisation
There are areas where the Indian cement industry could do with some support by way of regulatory reforms. A prime case in point is the Waste Heat Recovery System (WHRS), which is a major opportunity across industries in India. According to government data, the cement industry has the highest potential at 1100 MW, equivalent to 20% of the industry’s overall identified potential (5000 MW). A simple policy decision granting WHRS a status equivalent to renewable energy could sufficiently incentivise industry and bridge the payback period on CAPEX, as it is under due consideration. This is a low hanging fruit which alone could save 7 million tpy of coal with the present installed capacity. The cement industry has grown despite facing raw material constraints, particularly in regard to limestone. Although India has a mineral rich economy, it is constrained by sub-quality limestone, (sub-grade calcium oxide content) a vital raw material for cement. As per some estimates, the combined reserve life of presently estimated stock is barely 3 – 4 decades, which is also contingent on the pace of development of the mining sector. Between 2000 and 2017, India’s limestone imports have exponentially increased by 18 times, which poses resource security and dependency issues for the sector. Streamlining policy and the requisite regulatory push in the mining sector in India can help ensure sustained availability of domestic mineral reserves on the one hand, and at the same time, allow room for resource optimisation through utilisation of alternative materials and through technological advancement.
Moving ahead, the Indian cement industry is looking at new research and technologies for further development. Some of the future trends that may impact the cement industry in the near future are as follows:
Captive power plant (CPP) from renewable sources
The cement industry supports rapid expansion of renewable energy capacities by leveraging and transforming the captive power requirement of industry through renewable sources (wind and solar). It is well-aligned to contribute towards achieving the target of 175 GW renewables as part of India’s Nationally Determined Contributions (NDCs), which can attract investments of about INR 1.6 trillion for 20 000 MW of captive renewable capacity. This could potentially replace around 4000 MW of coal based thermal power generation. In the process, the industry is poised to reduce the intensity of India’s greenhouse gas emissions.
This is a potential resource-efficient solution as the cement industry can blend limestone and calcined clay. It is projected that Limestone Calcined Clay Cement (LC3) can reduce CO2 emissions by up to 30%. This is a development that could grow faster than expected given the high availability of limestone and low grade clay in India, as well as the fact that it is cost effective and does not require capital-intensive modifications in existing plants. Monitoring Installation of continuous emission monitoring systems, latest dust collection and suppression technologies are technology advancements being implemented across all major cement plants in India.
Carbon capture & storage
The Indian cement industry has already taken a step forward through the ratification of the Paris Climate Agreement. As the industry is working on existing levers to reduce GHG emissions, deep decarbonisation will require further technological development such as Carbon Capture and Utilisation (CCU). It is a major global technological race taking place in developed as well as developing economies, to safeguard the industry and infrastructure from the negative impact of climate change.
Low Carbon Technology Roadmap (LCTR) projections
The industry is working towards emissions reductions by 2050. According to the LCTR report, the cement sector has committed to reducing its direct CO2 emission intensity to 0.35 t of CO2 per t of cement in 2050. This would be about 45% lower than 2010 levels (saving 212 million t – 367 million t of CO2) in 2050, compared with the business-as-usual scenario. It will require a combination of policy support, technology solutions, public-private collaboration, financing mechanisms, and social acceptance together with sustained fl ow of investments to achieve the milestones.
Commitment to responsible business combined with sustainable growth is fast emerging as a cornerstone principle guiding the growth of the cement industry in India which considers itself an essential player in bridging the gap between the necessity for quality infrastructure and achieving the Sustainable Development Goals (SDGs).
About the authors
This article was jointly written by Cement Manufacturers Association and Global Cement and Concrete Association, India.
Read the article online at: https://www.worldcement.com/special-reports/13012020/india-cements-its-future/